Balancing Climate Change and Economic Development: the Case of China

Lin, Fan and Xie, Danyang (2023): Balancing Climate Change and Economic Development: the Case of China.

Abstract

We analyze China's economic growth and climate change relationship using a dynamic equilibrium model with regional disparity. Our simulation findings suggest that without intervention, China's temperatures could rise to 4.7◦C and 3.4◦C in advanced and backward regions, respectively, by mid-next century. A social planner path could limit this rise to 3.3◦C across both regions, yielding welfare benefits. However, if China adheres to the Paris Agreement's 2◦C limit without exceptional low-carbon technology advancements, significant social welfare losses could occur.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic Development, Climate Change, China
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E27 - Forecasting and Simulation: Models and Applications; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E61 - Policy Objectives ; Policy Designs and Consistency ; Policy Coordination; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming

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